Adjustment programmes and agricultural incentives in Sudan: A comparative study

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Elamin, Nasredin A. Hag
El Mak, Elsheikh M.
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African Economic Research consortium
This study analyses the impact on agricultural price incentives of the main adjustment programmes implemented by the Sudanese government during the period 1978-1993, notably the Economic Recovery Programme (ECRP) 1978-1985 and the national economic Salvation programme (NESP), 1990-93. The study addresses two basic questions: Did these programmes provide any tangible incentives to agriculture? And are improved price incentives an efficient and sufficient condition for increasing aggregate agricultural output? The effects of the programmes on the level and stability of price incentives were measured, both at the sectoral (direct) and economywide (indirect) levels. The results indicate that both programmes failed to improve either the level or the stability of real farm prices. Poor macroeconomic policies appear to be the main cause. With regard to the efficacy of price incentives in stimulating aggregate agricultural output, the findings tend to confirm the predominant view that increases in real farm prices have positive but limited overall effect on agriculture. Non-price factors appear to play a greater role in determining aggregate agricultural output. The analysis implies that without the provision of adequate credit, public investments and improvement in infrastructure, the aggregate response of agriculture to price incentives would be minimal.